What Is The Purpose Of A Comfort Letter?

Is letter of comfort a guarantee?

Comfort letters (also called letters of awareness, letters of support, letters of responsibility and letters of patronage) are a hybrid between a guarantee and making no commitments at all.

They are usually used where the issuer is unable or unwilling to give a guarantee, but wishes to give some comfort to the lender..

How long does it take to get a letter of comfort?

Any remedial works required must be completed within a specified period, usually 28 days, after which time the application may be refused. On completion of a satisfactory inspection, including where remedial works have been requested, a Letter of Comfort will be issued.

How do you write a comfort letter?

TipsKeep warm tone of the letter;Try not to describe in detail why you feel sorry for the addressee (i.e. Do not disassemble the prime factors of failure);In private letters, line refers to the emotions;More items…

What is bank comfort letter?

A Bank Comfort Letter is a document issued by a bank on behalf of its client (buyer) to a supplier, to assure the supplier of the financial ability and legality of the buyer in maintaining consistent trade. … In such a case, the supplier/lender may reconsider getting into an agreement with the buyer/borrower.

What is a SAS 72 comfort letter?

A SAS 72 auditor representation letter (also called, among other things, a SAS 72 letter, an underwriter representation letter or auditor representation letter) may be delivered by the underwriters or certain other parties to an issuer’s independent accountants (referred to herein as auditors) in connection with that …

What is capsule financial information?

Financial information included in an offering document for a securities offering that covers a time period more recent than the periods covered by the latest full financial statements in the offering document and that is neither audited nor reviewed by accountants. …

What does a letter of comfort mean?

A letter of comfort—also known as a letter of intent or a solvency opinion—is a written document that provides a level of assurance that an obligation will ultimately be met.

What is a bring down comfort letter?

Comfort letters are typically signed prior to the pricing decision or closing date for a given public offering or other transaction, as a part of the due diligence process. Subsequently, a “bring-down” letter is used to re-verify, as of a later date, that the original comfort letter is still valid.

Is a comfort letter legally binding?

Although courts generally viewed comfort letters as unenforceable, a court could, depending on the facts, find the comfort letter to be part of an implied contract and could find that the comfort letter provider assumed legal obligations.

What is a cold comfort letter?

comfort letter. in underwriting , a letter from an independent auditor reporting the procedures followed in reviewing unaudited financial statements and other data in preparing the registration statement and prospectus. Sometimes called cold comfort letter.

Who are comfort letters addressed to?

A comfort letter may be addressed to parties with a statutory due diligence defense under Section 11 of the act, other than a named underwriter, only when a law firm or attorney for the requesting party issues a written opin- ion to the accountants that states that such party has a due diligence defense under Section …

What is a letter of comfort which of the following is correct?

A letter of comfort, sometimes called a “letter of intent”, is a communication from a party to a contract to the other party that indicates an initial willingness to enter into a contractual obligation absent the elements of a legally enforceable contract.

What is SAS 100 now?

In November 2002, the Auditing Standards Board (ASB) issued Statement on Auditing Standards (SAS) 100, Interim Financial Information, which supersedes SAS 71. … The SEC requires public companies to engage an independent accountant to review interim financial information before it is included on Form 10-Q or Form 10-QSB.

How do I write a comfort letter to a friend?

In a letter of encouragement to a friend share a word of hope. It might be a word of cheer or of comfort. “I believe in you.” “You are going to do great.” Or “I am saddened that you are going through this hard time.” “I am so sorry that you are hurting.” Feel free to share a Bible verse or quote that comforted you.

Can a CPA write a comfort letter?

CPAs are regularly asked to provide a loan broker, lender or other third party with a comfort letter or verification letter on behalf of their clients. … Some lenders make requests for the CPA to provide information regarding their clients that the CPA cannot provide (e.g. solvency request).